Bullish on Memphis: Real estate analyst says city has all ingredients for growth

If you're down on Memphis and want to keep the feeling, don't come hear KC Conway next week.

The Atlanta businessman is bullish on what's about to happen in the economic development of Memphis, but not as a cheerleader.

As managing director for real estate analytics at the real estate firm Colliers International, businesses and investors pay for his guidance, including on where to put their facilities, employees and money.

"Memphis is one of my favorites," said Conway, the featured speaker Thursday at the 2013 Commercial Property Forecast Summit of the Realtors' Commercial Council.

"I'm really high and bullish on Memphis. A lot of people are surprised at that. They tend to think of Memphis as a little sleepier: Job growth numbers, housing foreclosures and defaults. Those don't always compare favorably, so people tend to put Memphis in the 'negative' bucket."

But as he drove his two children around Atlanta during an interview, Conway cited a number of reasons why Memphis has become the place to be, especially for logistics.

Conway was born into commercial real estate — his father was the land guy in developing Vail's ski resort. He attended Emory University and worked as an appraiser, underwriter, lender and credit officer before joining the Federal Reserve in 2005-2010.

There, Conway held several jobs that included briefing Federal Reserve Chairman Ben Bernanke and the board of governors monthly about real estate during the financial meltdown. His work earned him recognition from the Federal Reserve and Federal Financial Institutions Examination Council that included "Key Player" and "Meritorious Service" awards.

Now, "key player" and "meritorious" are how Conway might describe Memphis to clients wanting to improve their supply chains.

"I try to help people understand the recipe working in Memphis," he said.

One ingredient is Chicago, which has become the distribution bottleneck in the U.S., he said. "It now takes 27 hours to move a freight train through Chicago," he said. More and more companies are asking, where's the bypass?

The answer is Memphis and Indianapolis, Conway said.

Memphis combines tremendous infrastructure — air cargo, intermodal yards, rail, interstate highways, Mississippi River — with its FedEx hub, he said. That's a great blend for e-commerce, which is growing so fast. Nike recognized the city's assets in its decision last year to make a $300 million expansion of its distribution center here.

Memphis may be among the most expensive places in the U.S. for passenger flights, but for cargo "it's the opposite," Conway said.

Not only is Memphis an east-west bypass around Chicago, it is also north-south stop for goods flowing to and from Latin America, he said. Latin American countries are growing stronger and developing a middle class that will demand more products. "It's like the U.S. was in the 1950s," he said.

OSCAR is another ingredient working for the Memphis recipe, he said. More and more companies are starting to notice Memphis because of the new Ocean Shipping Container Availability Report, published monthly since late last year by the U.S. Department of Agriculture. For the first time, the report tracks the movement of empty and available intermodal shipping containers as they move to and from ports.

Manufacturers need to know where the containers are and if their cargo can get to the port in time, he said. "We never had that information available until December. Memphis is one of only 18 markets to achieve that stature," Conway said.

"In Memphis now, you are running almost 50 percent the equivalent of all of Chicago," he said. "It's an amazing number. No one would have known that except for that report."